Make Sure All Your Products Are Profitable, 2nd Edition (HBR Article Collection)

Most new products don't generate the expected profits. Why? We develop them to suit the "needs" of statistically average customers--not real human beings--so consumers reject them. We also expect new products to expand category demand. But people don't eat more or shampoo more frequently just because they have more product choices. Increasing the number of offerings also introduces costly complexity into our operations, shrinking margins. Finally, to boost revenues, we keep adding features to products--making them so difficult to use that customers return them and take their business elsewhere. Here's a better way: Ask real people what jobs they want to get done. Then develop offerings they'll "hire" for those jobs. Build market share for offerings that account for most of your sales. You'll enjoy healthier margins. Introduce product variety only if the resulting costs won't outweigh new revenues. And provide a variety of simpler, easier-to-use products--each tailored to a particular customer segment.